Still plenty to tempt awol first-home buyers as REINSW campaigns for reinstatement of $7,000 grant in state budget
First-home buyers can still take advantage of significant financial incentives and savings as state and territory governments prepare their 2013-14 budgets.
Victoria will be the first to announce its state budget on May 7 with Queensland to release its state budget on June 4 and NSW on June 18.
However, time is running out for some first-home buyer grants, which are due to expire at the end of the financial year.
In South Australia the $8,000 Housing Construction Grant (HCG) will expire on June 30. It applies to contracts entered into between 15 October 2012 and 30 June 2013, or in the case of owner builders, where construction commenced between 15 October 2012 and 30 June 2013. A property value cap of $450,000 applies.
And in the ACT, the Home Buyer Concession Scheme (HBCS), offering stamp duty concession to first-home buyers and anyone else purchasing a new home or residential vacant land under certain thresholds, is due to expire on June 30.
Nothing has yet been leaked about possible changes to first-home owner grants and stamp duty savings, but the Real Estate Institute of NSW (REINSW) is already campaigning for the reinstatement of first home buyer incentives in NSW for purchasers of existing properties as demand from this key sector continues to fall.
First-home buyer as a proportion of the mortgage market fell to just 14.4% in February, down from 15% in January, according to ABS figures - their lowest share of the market in more than eight years.
“We are calling on the Treasurer to not only reinstate first home buyer incentives that were removed in 2012, but to also explore additional opportunities to assist first home buyers to take their first step onto the property ladder,” says REINSW president Christian Payne.
“It is not too late for the NSW Government to reverse its decision to abolish from 1 January 2012, the stamp duty exemption/concession and from 1 October 2012, the $7000 grant, for those buying existing properties.
A similar campaign could be on the cards in Queensland, which also abolished the $7,000 first-home owner grant for those buying existing properties last year in favour of a $15,000 incentive for those buying or building a new home.
Changing the name of the scheme from the first home owner construction grant (FHOCG) to the 'great start grant’ in March is unlikely to have made any difference to sentiment.
This is what is currently on offer across states and territories:
Victoria
On January 1 this year, the state raised its stamp duty discount for homes priced under $600,000 from 20% to 30%.
The higher discount kicked in on January 1, 2013, and applies to both existing homes and new homes, delivering first-home buyers additional savings starting from $600 to a maximum of just over $3,000 on a house price at $600,000.
First-home buyers can work out their stamp duty savings using this table provided the Victorian government’s State Revenue Office.
Maximum stamp duty savings are now over $9,000. Combined with the existing first-home owners' grant of $7,000 there is nearly $16,000 in savings for those first-home buyers who are willing to venture into the property market in 2013.
The stamp duty discount will rise to 40% on January 1, 2014, and to 50% on September 1, 2014.
To qualify for the stamp duty discount, first-home buyers must also qualify for the $7,000 first-home owners’ grant.
All added up it means Victorian first-home buyers purchasing an existing home receive the highest amount of financial support from their state government.
Further information can be found on the Victorian government first-home owner website.
NSW
A first-home buyer who purchases a $550,000 new home will get $35,240 in assistance.
This includes a $15,000 grant for first-home owners who purchase or build a new home valued at up to $650,000. The grant is available until December 31, 2013, reducing to $10,000 from January 1, 2014.
Non-first-home buyers who buy a new home are eligible for $5,000 whether the new home is off the plan or newly built with a value up to $650,000, The $5,000 grant is also available to buyers of vacant land that is intended to be the site of a new home valued up to $450,000.
First-home owners are also eligible for a maximum stamp duty saving of $20,240 for homes up to a value of $550,000, with duty concessions for new homes valued between $550,000 and $650,000. The transfer duty exemption cap on vacant land is $350,000, with duty concessions for vacant land valued between $350,000 and $450,000.
Further information can be found on the NSW first home benefits website.
Queensland
A $15,000 first-home owner construction grant (FHOCG) is available. The FHOCG applies to new property bought or built at a value under $750,000.
First-home buyers also pay no duty on purchases up to $500,000, with a phasing-out rebate applicable for values up to $600,000.
For non-first-home buyers, the Queensland government offers a concessional stamp duty rate of 1% up to a value of $350,000, with stamp duty charged at normal rates for the remaining value of the home purchase. The buyer must occupy the home for a period of 12 months – an applicant may lose the concession if he sells or leases part or all of the home before moving in or within a year of moving in.
Further information can be found the Queensland first home owner grant website
South Australia
South Australian first-home buyers have the chance to secure $23,500 from the state government, provided they build a new home.
The $23,500 handout comprises a doubled first-home owner grant of $15,000 for contracts entered into on or after October 15 and up to a value of $575,000, plus a further $8,500 housing construction grant (HCG). The housing construction grant replaces the $8,000 first-home bonus grant.
The HCG is available to all builders of new homes for properties valued up to $400,000, phasing out for properties valued up to $450,000 where contracts are entered into between October 15, 2012, and June 30, 2013, inclusive.
Concessions could rise to $39,830 if first-tome buyers buy an apartment off the plan in the Adelaide CBD under $400,000, where a stamp duty concession of $16,330 applies.
This part of a new stamp duty concession scheme available on the transfer of a new CBD apartment or a "substantially refurbished apartment" for a contract entered into from May 31, 2012, to June 30, 2014, capped at stamp duty payable on a $500,000 apartment of $21,330.
An example where a $39,830 saving would be available to a first-home buyer is Aria on Gouger Street being developed by Brock Urban Projects, where two-bedroom apartments are priced from $335,750.
Up until June 30 2014, South Australian first-home buyers of established homes are entitled to a $5,000 grant. From July 1, 2014, no first-home owner grant is available to purchasers of established homes.
Further information can be found on the South Australia first-home buyer website.
WA
A $7,000 first-home owner grant remains in place for a newly constructed or established home. It does not apply to vacant land purchased to build a new home. The total value of the home must not exceed $750,000 if the property is located south of the 26th parallel of South Latitude, or $1 million if located north of the 26th parallel of South Latitude. First-home buyers eligible for the $7,000 grant pay no stamp duty on homes valued up to $500,000 and up to $300,000 for vacant land. There is also The Home Buyers Assistance Account, which provides a grant of up to $2 000 for the incidental expenses of first home buyers when they purchase an established or partially built home through a licensed real estate agent for the purchase price of $400,000 or less.
Further information can be found on the WA’s Department of Finance website.
ACT
A $7,000 first-home owner grant remains in place for both existing and new homes where the price of the property or construction of the home does not exceed $750,000. The territory government also offers a Home Buyer Concession Scheme (HBCS) to assist persons in purchasing a residential home or residential vacant land by charging stamp duty at a concessional rate. This scheme ends on June 30 and applies to homes valued less than $450,000 and land valued at less than $263,000.
Further information can be found on the ACT Revenue website.
Tasmania
A $7,000 first-home owner grant remains in place for both existing and new homes, with no cap on the value. Tasmanian first-home buyers buying or building a new home (including off-the-plan) are eligible for an additional $8,000 under the First Home Builder Boost Scheme, which applies from January 1 2013 to June 30 2014 if the qualify for the first-home owner grant.
Further information can be found on the Tasmania first home buyer website.
Northern Territory
For transaction after December 4 2012, a $12 000 first-home owner grant is available for an established home in the urban area or $25,000 outside of urban areas where the price of the property or construction of the home does not exceed $600,000. An urban area is the Darwin, Palmerston or Litchfield municipalities; Wagait Shire; the Darwin Waterfront Precinct; the “prescribed area” for the Darwin Rates Act, any other area prescribed by regulation.
The Northern Territory Government provides a stamp duty Principal Place of Residence Rebate (PPRR) to persons purchasing a new home or land on which to build a home. A calculator is provided to work out stamp duty payable on a home eligible for the rebate
Further information can be found on the NT treasury page.